I don’t know about you, but I am becoming really tired of the daily analysis of whether the Federal Reserve Bank will raise interest rates in 2016. Will they raise them at all? Will they raise them in September? Will they do a one and done?

Then there is the ongoing question about the Fed’s “credibility.”

Our current predicament began at the end of 2007, with the collapse of the housing market. Over the next two years, 8.7 million Americans lost their jobs. Millions lost their homes. U.S. household income dropped in the aggregate by about 10 percent and American household net worth fell 20 percent or more. Not since the Great Depression had our country become so justifiably fearful.

The Fed started to aggressively cut the interest rate that banks charge each other for overnight loans in January 2008, decreasing it by 0.75 percent, to 4 percent. A week later it cut the rate again, to 3.5 percent. Two cuts in March totaled another 1 percent, with further cuts, to 2.75 percent, in April. As the Fed moved along that slippery slope, rates approached zero.

At the same time, the Fed went rather rapidly from a typical balance sheet of $700 million to $800 million to in excess of $5 trillion by employing a technique of pumping money into the economy called Quantitative Easing. It did this initially by buying mortgage-backed securities, the very products that led to the financial disaster. They also bought medium- and longer-duration bonds. (The Fed is limited to buying federally insured bonds for its balance sheet.)

Some feared that inflation would follow, but nothing like that has occurred. The clear beneficiaries of these actions have been the recovery of the prices of homes and stocks, the latter now near record levels. Since the two principal sources of individuals’ net worth are homes and stock portfolios, this did make people feel better, especially if their homes no longer were worth less than the prices they had paid for them.

Years later, this shows up in high consumer confidence numbers. If you feel poor, you tend not to shop for things you don’t really need. But if stocks and your home are approaching record levels, you are more likely to spend on goods and services.

The Fed went through various iterations of Quantitative Easing: Versions 1 and 2, Operation Twist and then Version 3. It is hard just a few years later to remember all the nuances of each. But certainly the initial promises that rates would be suppressed only temporarily proved to be wrong.

In 2015, the Fed asserted that it felt that job growth and low inflation were putting the economy onto a stronger path, so it could begin to raise rates again. The plan was for as many as four rate hikes in 2016, with projections of anticipated inflation as well. So far, none of that has happened, because of the collapse in the prices of oil and other commodities. Then the markets began 2016 with a vicious selloff in which many securities dropped as much as 20 percent or more from their 2015 highs. The Fed backed off.

It was starting to feel more confident, then one poor jobs report threw everything into a cocked hat. More recently, larger employment gains have indicated we are nearing “full employment.” So now the Fed is again talking about at least one rate increase this year.

During seven years of trying to correct the imbalances caused by the Great Recession, the Fed has had to walk a tightrope of uncertainty. Nobody has really tried these easing policies on such a massive scale before and there is no playbook on how to unwind them. The Fed policymakers now are all out on the talk circuit, voicing their own views. That is not helping, either, as it just means there are more tea leaves to read. It gets little praise for its efforts, but without the Fed it is hard to imagine how the U.S. would have made it through the challenges.

I’m in the camp that September should see a rate rise. But it is easy to argue that the Fed will take no action until after the presidential election in November, to avoid appearing to be meddling in politics. That would point to December for the next increase. In other words, we are in for more months of Fed speculation.

— Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com. Follow her observations on politics and the world around her on Twitter: @joanlappin. Read past columns at deducedreckoning.blogs.heraldtribune.com.

Bill Gross, the founder of bond megalith PIMCO, became the billionaire bond king by running the best bond fund in the U.S. for decades. Gross, now at Janus Capital, has gone public recently with his strong views that bonds offer little value now to investors.

George Soros and his former sidekick, Stanley Druckenmiller, both billionaires, have been on television sharing their apocalyptic views that stocks are overvalued. Current guru darling Jeffrey Gundlach has been saying for months that stocks were carving out a “dome of doom,” a 15-month chart pattern in which the Dow Industrials and the S&P 500 were unable to reach new highs.

Then stocks broke through to modest new highs in July. So much for Gundlach this year. Carl Icahn has also bet wrong lately, predicting gloom and doom for months.

John Paulson became a billionaire by betting against the collateralized mortgage obligations products that brought down the housing market and almost the world banking system in 2008. He was an average money manager until that one trade (the idea of one man on his staff, who has since left) brought him fame and fortune and billionaire status. Paulson followed that trade with a very heavily leveraged bet that gold would rise from $1,890, its then peak price in 2011. Instead, it fell to a low of $1,050 in 2015. One of his leveraged gold portfolios fell by 90 percent as a result. I’m not sure we should care what he thinks.

As 2016 progresses, all these very rich men have been embarrassed by Mr. Market. The reasons are both simple and complex. Despite Republican election year characterizations of the economy as bad and mishandled over the last eight years, the statistics paint a different story. The economy continues to grow for the longest period since World War II. Unemployment has fallen from double digits to under 5 percent, often considered to be full employment.

Growth, however, is tepid and has been slowed by the lack of infrastructure spending that normally flows from congressional fiscal policy to repair roads, bridges and airports in economic downturns.

Frankly, there is no roadmap for the Federal Reserve’s unprecedented flooding of the U.S. economy with funds. The strategy of pushing down interest rates to near zero has helped homebuyers, for sure, with record low mortgage rates reinflating housing prices. It has also flowed into higher stock prices. But it has severely punished seniors who saving for retirement who were told that, as you age, you should increase bonds and Treasuries as a percentage of their investment portfolio. Also, corporations have refused to spend that cheap money on new factories to create jobs and ensure future growth. Instead, they are paying out more in dividends and buying back shares.

Last year, the Fed finally raised interest rates for the first time in years to begin the road to normalization. It implied it was going to keep raising rates, perhaps a quarter of a percent each quarter during 2016. Then the markets began 2016 with a dramatic collapse in stock prices. Many stocks dropped 20 to 25 percent in just weeks from their highs in the fall of 2015. It scared everybody. Me, too. The Fed froze in its tracks.

Through all of this uncertainty, the U.S. economy hasn’t complied with all the gloomy, doomy forecasts. Foreigners are still investing their money in our markets. Consumers continue shopping, even if not at the mall. Gas prices at the pump are a weekly gift to all of us. Inflation is very low. Maybe there is nothing to fear but fear itself.

The investment goal for our clients at Gramercy Capital has always been inflation plus 6 to 8 percent. That means that in a 1 percent inflation period, a gain of 7 percent on your portfolio keeps your purchasing power increasing well beyond inflation, which is the real goal of investing. If you combine a 2 percent dividend payment on a $20 stock that goes up only a dollar during the year for a 5 percent capital gain, you have earned your 7 percent goal.

For sure there aren’t bargains galore, as there were after 2008-09 or even this April at the bottom. Modest 4 to 7 percent corrections can happen at any time. For now, the dips should be used to add to your holdings.

— Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin. Read past columns at deducedreckoning.blogs.heraldtribune.com.

It has been only three months since I wrote about the ascendancy of Crown Prince Mohammed bin Salman, the 30-year-old son of King Salman, to consolidate power in Saudi Arabia. The elder Salman is now 81, and became King of Saudi Arabia in 2015 following the death of his older brother, Abdullah. His son understands the problems at hand.

The price of oil bottomed in February near $26. The Saudis’ goal of pushing oil prices very low by continuing to pump at high levels was to force many overleveraged smaller American oil and gas producers into bankruptcy, thus reducing supply again. The first part of the strategy was successful. Between 150 and 200 U.S. exploration and production companies have filed for court protection under various bankruptcy laws and stopped or reduced production. New exploration is at a standstill.

For decades, Saudi Arabia was the swing producer. When oil prices would surge higher, the Saudis would pump more to oversupply the market and bring prices back in line. When prices would fall, the Saudis would reduce the amount of oil they offered to the market, providing a price floor.

Saudi Arabia was counted on to provide stability for oil prices and to bring supply and demand into balance. But the kingdom has lost market share and is no longer so dominant.

In recent years, Russia has become a major oil and gas producer, and hydrocarbons became the lion’s share of its foreign exports. President Vladimir Putin has made his economy heavily dependent on the sale of oil and gas to garner foreign exchange funds. It is the sale of hydrocarbons that pays pensions for the elderly and funds wars like the invasion of Crimea or involvement in Syria. So Russia has increased production as much as possible in recent years, to near 11 million barrels per day.

Over time, the Saudis lost market share to both the Russians’ aggressive actions to sell its hydrocarbons to Europe and China and to the growing energy independence of the United States after fracking swept America. We are no longer so dependent on Saudi oil to keep our economy running.

Saudi Arabia is blessed with plentiful reserves and a very low cost to discover and lift its oil out of the ground — estimated to be around $10 per barrel. U.S. producers don’t break even until oil is over $60 per barrel, which is why, with prices in the $40s of late, so many companies have failed this year.

To retain the support of its subjects, the Saudi royal family has provided free college and jobs to the 70 percent of the country’s citizens who work for the government. To support these social programs, the Saudis need oil to exceed $100 a barrel.

Both Putin and the Saudis need the price of oil to stabilize far above the $26 low it hit in the first quarter. So does Venezuela, where the economy has collapsed. Oil recently peaked near $50 a barrel but then fell into a bear market 20 percent correction to below $40.

Neither Putin nor the Saudi royal family can support social programs designed to stay in power and suppress social unrest if they don’t have the cash to do so. These leaders have only to look around at those parts of the Middle East affected most by the Arab Spring to know that something has to change or they, too, will lose power.

That’s quite an incentive for change.

So enjoy that very cheap gas for your car while it lasts in a world awash in oil.

Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin. Read past columns at deducedreckoning.blogs.heraldtribune.com. Neither she, Gramercy Capital nor its clients own any security mentioned in this article.

Economic reports this week are drawing attention to the dearth of productivity improvements in the U.S. economy for several quarters. One of the mainstays of America is our ingenuity and our leaders in innovation are in Silicon Valley in California and Silicon Alley in New York City. There, work continues on both hardware and software to run computers better, faster, with less heat and in a more user-friendly way. Robots to which you can give voice commands encompass all of those aspects of innovation.

In the modern world of financial engineering and sleight of hand to manufacture better earnings, product innovation has taken a back seat at many companies. Since investors are craving dividends, companies are paying out bigger quarterly payments or buying back shares as a way to make earnings go up. That only works for so long.

Eventually, you wind up like Eastman Kodak, which invented digital photography but couldn’t keep control of the photography market once our mobile devices contained cameras.

Internal squabbling led to that demise. The film side of the business made all the profits and the digital inventors were only costing money and detracting from reported earnings and therefore bonuses. So the investments for the future weren’t given the focus they required to support Kodak into a vibrant future. One of the greatest brand names of all time went bankrupt.

One company that has done the opposite is Amazon. I’ve never owned it because the company, until recently, has never reported earnings. CEO and founder Jeff Bezos always has a scheme in which he is investing for the future.

First it was upending retailing by selling books on line. My original summary of his business plan was “sell a book, lose a buck” and that is pretty much how Amazon went in its early days. Then he expanded into music, a business that was already on the skids. The stock rose and then crashed with the market when it appeared that Bezos had run out his string on borrowing money from investors to fund his futuristic vision.

At one point he realized he had to do something about his cash flow. He began to operate on the premise that whatever cash he had received from the investing public was all he was ever going to get.

Along the way, Bezos expanded into offering just about everything you could buy in a retail store. You didn’t have to spend time in your busy life to go to the store. He would deliver whatever you wanted to your door in a few days. If you live in New York or another major metro area, he will bring it to you today.

Eventually, he decided to offer “free delivery.” So not only did you not have to pay taxes for purchases on the internet, getting it to your door was free. In the future they might deliver your order to you by drone and they are on the cutting edge of that new concept, too.

Meanwhile, a few years ago, Bezos spent heavily on positioning Amazon to provide cloud storage services to customers big and small. He saw the direction big data was going and decided to lead, not follow, into that new vertical business. It has now become a key profit center for Amazon.

Microsoft only thought of doing that lately after it replaced Steve Ballmer with Satya Nadella. Nadella ditched Nokia’s cell phone business on which Ballmer wasted billions and refocused on Windows 10 and also on the cloud. Microsoft had to do something. They pretty much missed the move to mobile computing, as did Intel and other big companies. But at least they took action in time to effectively compete in the cloud space.

Nevertheless, MSFT is only now recovering to the levels it was at when the tech bubble burst in 2000. Amazon, without earnings to talk about until lately, was busy forging totally new markets and building for the future, earnings be damned.

Somehow, the markets have loved what Bezos was doing. Amazon closed Wednesday at $768. Microsoft at $58 is still not back to its high of 16 years ago near 60.

— Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin. Read past columns at deducedreckoning.blogs.heraldtribune.com. Neither she, Gramercy Capital nor its clients own any security mentioned in this article.

No, it’s not you. Nobody quite knows what is going on this year. How could anyone? The world is in turmoil.

ISIL is the extreme representation of economic dissatisfaction. People are buying weapons of war and unleashing them on their neighbors and coworkers, people at clubs, shoppers at malls and strangers at airports.

The year began with a totally unexpected rout that started just hours into 2016. Just six weeks into the New Year, markets were down 10 percent. From the peak last summer to the bottom in the first quarter, vast numbers of stocks had lost 20 percent or more of their value. Many investors ran for the hills in the first quarter and missed a “Yuge” rally off the bottom.

It seems they are still running away from stocks at mid-year. We all have 2008-2009 in the rear view mirror. Fear rears its ugly head at the tiniest drop of the Dow. Remember that the talking heads will tell you this is the worst six-day losing streak since March a week after we have just had the best six-week winning streak in 18 months. That translates into “Whipsaw City.”

Frankly, the Wall Street Wizards who barely pay taxes and so instead can buy a $25 million summer house in the Hamptons are also having a hard time making money. They are seeing massive redemptions from their hedge funds where the fees used to be 2 percent off the top and 20 percent of the profits if there are any. Several of the brightest lights had down years in 2015 and aren’t doing much better this year. Many are losing assets, big time.

Here is the puzzlement: As per data tracked by Citicorp, Equity Mutual Funds lost $18 billion to redemptions in May. That was followed by $19.4 billion withdrawn in June. Usually, investors add $6 billion in May and $8.0 billion in June. Their actions are reflecting fear and uncertainty over events such as the U.K. vote to leave the European Union and confusion over the outcome of the presidential election in the United States.

Exchanged traded equity funds added $1.4 billion in May and $8.4 billion in June but that is a pittance compared to the $37 billion that left U.S. equity mutual funds in that same period. Between the two months, $1.4 billion also went out of money market funds. It’s as if there is some investment black hole into which these investment funds are evaporating.

If money is flowing out, then the law of supply and demand would lead us to expect stock prices to fall. Instead, the averages were rising to a new all-time high in the Dow in recent weeks.

On some level, the Fear Factor is easy to explain. The Great Recession of 2008-9 is still a fresh and raw memory for many. Most are worth less now than they were then. Those who saved for retirement are being punished because they cannot live off the very low if any interest they are being paid on the money they saved for their old age.

Despite political rhetoric to the contrary, unemployment is the lowest it has been in years. Wages are starting to rise. Inflation is low and rising tax collections are reducing the deficit, however slowly. Those are usually the issues that fuel an economic revolt.

This time around, we are facing a structural alteration of the economy caused by the rise of computers and the elimination of many categories of jobs. Look at the companies that are thriving now even in the technology sector. It’s not hardware that is profitable. It is the software companies that are winning the day. Social media, cloud computing and software engineers are in highest demand at companies that are disrupting the ways things have been done for years.

While the focus may be on disappearing manufacturing jobs, you push the button when you ride an elevator these days and you pump your own gas when your car needs a refill. It is not about foreign trade. It’s about the Congress starving the economy for fiscal stimulus. No matter who wins in the fall, expect both parties to cooperate to rebuild of our infrastructure: roads, bridges and airports.

That will push money into the economy for something real, not just financial engineering with Ben Bernanke’s helicopter money from the Federal Reserve to keep things afloat until the Congress gets its act together.

— Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin. Read past columns at deducedreckoning.blogs.heraldtribune.com.

On Monday, Yahoo reported its second-quarter financial results. In a nutshell, they were grim and resulted in an extraordinary level of spin-doctoring usually seen only in politics.

The rate of collapse of this company is not showing any signs of abating. Yet if you listened to the rhetoric on the conference call, you would have heard a glossing over of some horrendous business decisions by CEO Marissa Mayer and the bad numbers that show that Yahoo’s search and ad businesses continue to decline.

Yahoo CEO Marissa Mayer (AP Photo/NBC, Peter Kramer, file)

I’ve written about Mayer before. She was lucky enough to be at Google early on (as employee number 20), so she was able to cash out big time in her early 30s when Google went public. She used those gains to buy a huge penthouse apartment in the Four Seasons in San Francisco, where she previously lived. She also is reportedly a possible buyer of a $30 million mansion in San Francisco in the same neighborhood as Oracle’s Larry Ellison and Apple’s Jonathon Ivey. She’s had a son and twin girls in the four years this month since she joined Yahoo in July 2012 and she must need a bigger place.

So she was already wealthy when she joined Yahoo, simply from being in the right place at the right time. Mayer was a star at Stanford and successful at and a public spokeswoman for Google for some while. Then Eric Schmidt, then CEO, demoted her. Perhaps he saw something that should have been a red flag for the folks at Yahoo but wasn’t. Perhaps she had reached the limits of her management abilities.

At Yahoo, she’s been paid $1 million a year in salary with the potential for a $2 million bonus. But the big money came in the form of stock grants and options probably now worth about $300 million with the stock valued near $40. It has moved higher this year as bidders have looked over the books.

One of Mayer’s signature decisions after joining Yahoo was the purchase of a nascent social media company called Tumblr for $1.1 billion. At the end of 2015, Tumblr was written down by $230 million and, in the latest quarter, it was revalued still lower by $482 million. That leaves Tumblr on the books for about 30 percent of what was paid for it in 2013.

That is a stunning disaster.

Yahoo’s core business is for sale. It was originally thought it would be sold for $5 billion to $10 billion. It owns a sizeable stake in the Chinese internet giant Alibaba and also in Yahoo Japan, which wisely were put on the books years ago by Jerry Yang, a Yahoo founder. Recent articles have indicated that only a few bidders have shown up and the prices for the Alibaba and Yahoo Japan assets have been rumored to be as low as $3 billion to $5 billion.

Compare that with brand-new companies that may be the Tumblrs of 2016 going public for amounts valuing them at more than $1 billion, the definition of a “unicorn.”

One of the things that emerged recently from the efforts to sell Yahoo’s core business was that, in order to “put lipstick on a pig” and to buy search volume for the Yahoo site and sell more ads, Mayer made a deal with Mozilla to be search engine of choice for users of Mozilla’s Firefox browser.

Yahoo guaranteed Mozilla $375 million in annual revenues. There is a small-print clause in the deal that says Mozilla gets paid even if control of Yahoo changes hands, which it is about to do, and it doesn’t want to stick with Yahoo for search. That sounds like a deal struck in desperation because it puts a billion-dollar obligation on the company going forward.

So with just two examples of terrible judgment by Mayer and Yahoo’s board of directors, it’s that old saying, “A billion here and a billion there and it starts to be real money.”

Meanwhile, Mayer can become a stay-at-home mom, run for political office and live a hundred lives of leisure with the money she has been paid to create this embarrassing mess. It’s that other old expression: “laughing all the way to the bank!”

— Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin. Lappin, Gramercy Capital and its clients own Yahoo shares.

During the current election season, there has been extensive discussion about the loss of U.S. manufacturing jobs to lower-wage economies.

As we have moved well beyond a manufacturing economy, it isn’t realistic to assume that jobs to make things in the U.S. will suddenly reappear, especially if the minimum wage is increased a lot for entry-level jobs. There is a point at which the French fryer at McDonald’s can be operated by a robot that doesn’t call in sick and doesn’t get benefits.

The National Association of Manufacturers has on its website, at nam.org, some very interesting statistics about what U.S. manufacturers now contribute to the U.S. economy. By its count, 12.33 million workers in the United States are involved in manufacturing. Yes, that’s a sizeable chunk but it accounts for just 9 percent of our labor force.

The standard of relevance for public companies when reporting their financial results is if something is more than 10 percent, it is considered “material.” So the number of Americans employed in manufacturing in our economy is by that measure no longer even relevant. Yet it is an important revenue stream for those who hold those jobs and for the United States’ balance of trade. And it is a terrific talking point in the current election cycle to those who have been displaced.

Thanks to the efforts of the labor unions decades ago, manufacturing jobs are great jobs if you can get one. They average $79,553 a year in pay and benefits. That quite surpasses the average worker in all industries, who earned $64,204. NAM cites a study by the Kaiser Family Foundation that indicates that 92 percent of manufacturing employees receive health benefits, compared with 79 percent for all firms.

Companies that make goods for the export markets pay even better than that, according to NAM. “Jobs supported by exports pay, on average, 18 percent more than other jobs. Employees in the most trade-intensive industries earn an average . . . of nearly $94,000, or 56 percent more than those in manufacturing companies that were less engaged in trade.”

Due to foreign trade agreements negotiated years ago, NAM reports: “over the last 25 years, U.S. manufactured goods exports more than quadrupled,” from $330 billion in 1990 to almost $1.4 trillion in 2014. Yet, aided by computers and other manufacturing efficiencies, fewer workers are needed to produce those goods.

NAM contends that over 3.5 million new jobs will be created in the manufacturing sector over the next decade and over 2 million of them will go unfilled because of a lack of skilled workers. That sounds to me like an area to focus on to create new opportunities for American workers.

On the topic of trade agreements, since 1990 U.S. manufactured exports to our largest trading partners have increased fourfold. Those countries include Mexico and Canada, our cross-border neighbors, and China. Each is a nation with which we have a free trade agreement. Please note we enjoy a $55 billion trade surplus with the FTA countries with which we trade. The problem is our $579 billion trade deficit with those countries with which we do not have such agreements in place. The implication is that putting up protectionist barriers may not be the best way to go.

Our manufacturing exporters play another vital role in our economy. Per NAM, 75 percent of all U.S. research and development, or $229 billion in 2014, was spent on by exporting companies. Just about a third of that was spent on drug development by the pharmaceutical industry. Other big exporters include aerospace, chemicals, electronics, including computers, and motor vehicles — all of which are on a never-ending quest for new patents.

There is no question that many low-skilled jobs in the apparel industry can be made more cheaply outside the U.S., where we know wages are not remotely comparable. There are no benefits and the workers often include children who work long hours.

Quality certainly isn’t the same. But computers have probably replaced more people than our trading partners have. There are no free trade agreements with them.

Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin.

One of the more ignored stories to come out of the so-called “Brexit” vote involves so-called robo investing. In an environment in which the Dow Industrials have been range bound for a year and a half, many people are erroneously assuming that active managers simply cannot serve a useful purpose to justify their fees. Perhaps a dart board or a robot can do it better.

Stocks rose a lot in the days leading up to the “Brexit” as the oddsmakers predicted that the referendum would not pass. Then the results came in and the “leave” vote won the day. The following morning, the Dow crashed about 500 points. If you panicked with the crowd, you were crushed trying to get out. Stocks fell sharply for two to three days, then turned up for a vigorous rally. Over the two-week period, stocks rose, fell and rose again. When it was all over, the market was essentially unchanged!

Experienced managers told their clients to stay calm and ignore the uproar. A week later, they were vindicated.

One of the pioneers of robo investing is a firm called Betterment. The first sentence on the Betterment website says “investing is a formula-driven science, not an art.” I believe just the opposite. It is an art based on factual information that I have practiced for decades.

Robo investing is based on the premise that the stock markets are efficient, that every bit of information that is known is already reflected in the price of a stock. But in my decades of finding undervalued stocks that are ignored by Wall Street firms, I know that not to be true. The market is not efficient. There are always pockets of opportunity.

Human intervention by an experienced practitioner should over time beat a robot hands down in a normal environment for growth investing. We are not in a normal environment right now. That’s why interest rates on bonds are approaching negative levels and the Dow Industrial stocks are laboring to advance out of a narrow trading band between 17,000 and 18,000.

A robot advising your portfolio is structured as a homogenized approach to investing your retirement funds. Because the service is so automated, the companies can charge a small fee. Yes, initially you decide on how much risk you can tolerate. Then they propose to put your “portfolio on autopilot … and personalize every portfolio for exactly your needs.” Somehow, personalized and autopilot seem to be an oxymoron.

Betterment goes on to say that, “research has shown that investors can lose potential returns due to their irrational behavior (like trading too much, trying to time the market, or not rebalancing regularly).”

Stocks don’t trade so much on the past as they do on future results. That’s where a human with experience can serve you well. We don’t always get it right but it is the interpretation of the economic news, an evaluation of management, or industry changes that might shine some light on what the future might hold for a company, causing it to be underpriced. A good adviser can help you with personalized planning. And, most importantly, they can provide you with a person to talk with when markets are swinging wildly.

A computer can calculate statistics up and down, left and right faster than any human can once a human pushes the start button. But the human can interpret and analyze those future prospects with insight and wisdom that simply cannot be reduced to a mathematical formula.

Betterment says its goal is to help you define a formula to rate your own emotional commitment to your investments to determine a “risk tolerance.” Then it mechanically picks a portfolio of exchange traded funds to help you meet your goals. Somehow this is also supposed to be very tax efficient as well.

It purports to remove the emotions and “fear factor” from your portfolio by letting the computer make the decisions. But something went terribly awry in the aftermath of “Brexit” at Betterment.

Betterment panicked big time on June 24th when it halted trading on its investment platform for two and a half hours. It is not clear what they were scared about. Apparently, their contracts stipulate that they have the right shut down like this if they so choose. Most likely it is buried in the boilerplate in small type and most people sign without reading it. The firm admitted it did a poor job of communicating what it was doing as it was doing it.

If you were scared to death about the possible collapse of Europe, or the U.K. and wanted to get out, you couldn’t if you were their customer. The computer, not you, was in charge of your account.

The Wall Street Journal quoted Massachusetts Secretary of the Commonwealth William Galvin as saying that, “The precedent this sets is a real bad situation where people are desperate to get liquidity and they can’t.”

— Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin. Neither she, Gramercy Capital nor its clients own any security mentioned in this article.

Well, maybe not so fast. As the world waited for the Brits to vote on their continued membership in the European Union, the polls showed that the U.K. would vote to remain. So did the odds at the betting parlors. Stocks, as measured by the Dow Industrials, had a couple of very strong days. Then the vote came in and markets went in the opposite direction. Everyone lurched from one side of the ship to the other and decided the end of Western Civilization was at hand and they should “sell, sell, sell.”

So they did.

Those firms that constantly peddle fear in their investment advice were reminding us how they had told you the wheels were about to come off the world economy. The averages dropped several hundred points on Friday after the vote and followed to the downside on Monday. By Tuesday’s close, the averages were right back to where they had been the previous week before the surge and then continued higher. Same ups and downs we have experienced for months, just more exaggerated.

With so many people “trading” these days instead of patiently trying to invest, being whipsawed is very common for those with a very short-term mentality and an equally short attention span.

Perhaps it matches the text-message approach to life rather than a phone call to your parent who would love to hear your voice or the twitter limit of 140 characters to convey your public message to others. Now, four days later, Brexit seems to be rapidly evaporating as an investment concern. The U.S economy was stronger in the first quarter than originally reported and consumers were more optimistic than they were a few weeks ago.

We know it will take time for Britain to leave. We know that many voters were fed some misinformation on which to base their decisions. We know that there is no turning back and that Prime Minister David Cameron has said he will resign over the vote. But we also know that Britain never abandoned having its own currency in favor of the euro and that the Brits were always cautious about the European Union from the outset almost 25 years ago.

It is clear that a primary cause of concern in Europe, in Britain and in the United States is the influx of immigrants from the Middle East. The Paris attack was perhaps less of a surprise than it might have been because about 1.7 million Muslims were living there as of 2010. There are only more living there now. Stockholm, Sweden, has an Arab population of 20 percent; Brussels, Belgium, and Marseille, France, have 25 percent Arab populations.

Within the U.K., the Arab population has reached 32 percent in Bradford, 28 percent in Blackburn, 27 percent in Birmingham, 25 percent in Luton, 23 percent in Slough, 16 percent in Manchester and 12 percent in London.

The E.U. and Angela Merkel this week have said you can’t openly want to do business with us but refuse to have open borders to admit more immigrants from the Middle East. That is the stumbling block for Merkel on one side and for U.K. voters on the other.

One would conclude that voters fear dilution of native ethnic populations and living in a country in which century-old traditions are overrun by newcomers. This is true across Europe and is a theme into which Donald Trump has tapped in his run for the presidency of the United States.

For now, it appears we will remain trapped in this trading range between 17,000 and 18,000 on the Dow Industrials. The economy is OK but not great. The Federal Reserve is caught in a trap. And Congress won’t do anything until at least next year, after the election.

Nothing new in observing that bond yields aren’t enough to enable senior citizens to live off their savings. Stock yields are now above 2 percent, so that should be encouraging for the stock markets. If you are buying stocks for their dividends, make sure they are solid companies with dividends that are well covered long into the future by the company’s stream of earnings.

— Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin. Neither she, Gramercy Capital nor its clients own any security mentioned in this article.

It’s hard to believe we have been in the era of mobile devices for 30 years.

Think back to the first mobile phones that people used in the late 1980s. Bag phones, as they were called then, weighed 6 or 7 pounds and came in canvas bags to make them easier to carry around. They sent out a 5-watt signal to a cellular tower that covered a wide area in a community. If you drove from one community to another at a particularly fast speed, your call would be dropped. If you drove across the line between one telephone carrier and another you would be charged $1 or more per minute for “roaming charges.”

Now, everything has changed. Thanks to Motorola’s “flip phone” and Steve Jobs’ imagination, far more sophisticated smartphones became small enough to fit in your pocket or purse, weighing just a few ounces. They are reliable, dependable and we “don’t leave home without them,” although that tagline belongs to American Express. In fact, they aren’t really phones or even “smartphones” anymore. They are true computers in our hands and are used least for voice communication.

We pay bills, read the newspaper, play games and watch TV on them. In fact, their principal job now is to keep us connected to vast streams of content and data. We expect them to stay charged all day and to perform with limited “latency” — in other words, with only milliseconds elapsing while we wait for signals to be sent and answers to return to the device. The quantities of that data and video are expanding exponentially.

In the United States, the world has evolved toward two very dominant carriers and two hanging on to survive. Verizon and AT&T each now have about a third of the market. The remainder is split between T-Mobile and debt-laden Sprint.

An attempt to merge those two companies into a third, viable competitor was blocked a few years ago by the Justice Department and the Federal Communications Commission, so they flail on separately.

Sprint has been 80 percent owned by Masayoshi Son’s Softbank Group since 2013. He had successfully built a formidable telecom provider in Japan and thought he could replicate that model in the U.S. So far, his efforts have been futile, as Sprint labors under excessive debt.

Softbank held very large positions in China’s Alibaba Group and in the highly successful Finnish game maker Supercell Oy. The Alibaba stake was sold for $7.9 billion and the Supercell stake was sold this week for $7 billion in an effort to whittle down the $80 billion of debt Softbank recently had on its books. Softbank has investments in hundreds of companies, some of which have been hugely successful, like these two. That cannot be said of Sprint, which seems to be Son’s primary preoccupation these days as a blight on his brilliant career.

Over the next three to four years, all U.S. carriers will have to spend billions to build new data-efficient networks that will provide low latency, high capacity and outstanding encryption via what is now known as 5G service. The industry standards have not yet been hammered out, but the expectation is that more powerful 5G (fifth generation) service will be here by the end of this decade to replace 4G.

For sure, most of us are evolving toward one phone number on which we can be reached wherever we are: at home, at work, on vacation, or at leisure even on the other side of the world. Many people no longer bother with a landline at home.

The Apple watch may be an early, primitive version of what lies in the future. A smaller form factor will require that voice commands will supersede “fat finger” typing. That would push us toward even smaller devices, such as Dick Tracy wore on his wrist when crime-stopping in the comics decades ago.

On the other hand, who wants to watch a movie on a 1-inch screen?

— Joan E. Lappin CFA founded Gramercy Capital Management, a Registered Investment Advisor, in 1986. She is known for her unique perspective, her stock-picking abilities and her analytical skills honed by decades in the investment business. She would love to hear from you at jlappinCFA@gmail.com Follow her observations on politics and the world around her on Twitter: @joanlappin. Neither she, Gramercy Capital nor its clients own any security mentioned in this article.